The New York stock market closed higher despite President Donald Trump’s additional tariff announcement. The so-called "bad is good" trend continued as investors interpreted the negative news as a resolution of uncertainty and bought stocks.
On the 14th (local time), the Dow Jones Industrial Average on the New York Stock Exchange closed up 88.14 points (0.20%) at 44,459.65. The Standard & Poor's (S&P) 500 index rose 8.81 points (0.14%) to 6,268.56, while the Nasdaq index recorded an increase of 54.80 points (0.27%) to 26,040.33.
On the 12th, President Trump announced a high tariff of 30% on the European Union (EU) and Mexico. This additional measure, alongside existing items like steel and copper, is set to take effect on August 1.
However, the stock market did not fluctuate significantly despite the tariff announcement. On the day, New York index futures started down over 0.5% in Asia but narrowed the decline to a flat range before the opening of the New York market. The market believes there is still time until the announced tariffs are actually imposed, and it is likely that the actual applicable figures will decrease.
JPMorgan Chase noted in a report that "Trump may ultimately lower or postpone the tariff levels," adding that "even if a short-term adjustment occurs, it could be viewed as a buying opportunity." They further stated, "The market's focus is now shifting towards corporate performance."
In the market, there are also assessments that uncertainty has eased as Trump largely disclosed tariff policies against major trading partners. Glen Smith, Chief Investment Officer (CIO) at GDS Asset Management, stated, "Whether corporate performance can overshadow remaining tariff concerns is the market's point of interest," adding, "Thus far, the market has been able to withstand the tariff headlines."
This week, starting with JPMorgan Chase and Morgan Stanley, U.S. corporations will begin to announce their second-quarter earnings. Investors are focusing more on the guidance for the second half than on the earnings themselves.
Paul Hickey, founder of Bespoke Investment Group, commented, "It's not unusual for there to be slight selling pressure during the first earnings announcement," adding, "As we enter the seasonally weak period, there is also the possibility of adjustments given the heightened earnings expectations."
By sector, energy fell by more than 1%, while healthcare, materials, and technology stocks also closed lower. The Philadelphia Semiconductor Index dropped by 0.87%, with 26 of the 30 stocks declining. Among large technology stocks, NVIDIA, Microsoft, and Apple showed weakness, with Apple falling by 1.2%, putting its $3 trillion market capitalization at risk.
In contrast, artificial intelligence (AI) defense company Palantir surged by 4.96%, surpassing a market capitalization of $337.5 billion. It rose to the 11th position in terms of market cap on the Nasdaq. Bitcoin-related stocks also showed strength, as Bitcoin broke through $120,000 for the first time, and Strategies rose by 3.78%.
In the federal funds futures market, the probability of a 25 basis point rate cut in September is reflected at 59.3%. The CBOE Volatility Index (VIX) recorded a rise of 0.80 points (4.88%) to 17.20 compared to the previous day.